A company issues $5,000,000, 6%, 10-year bonds to yield 8% on January 1, 2017. Interest is paid on June 30 and December 31. The proceeds from the bonds are $4,320,500.

Using straight-line amortization, what will:

a) The carrying value of the bonds be on the December 31, 2018 balance sheet?

b) How much interest expense will be recognized in 2018?

Using effective interest amortization, what will:

c) The carrying value of the bonds be on the December 31, 2017 balance sheet?

d) How much interest expense will be recognized in 2017?